Activity 7 - Calculating Elasticity

Activity 7 - Calculating Elasticity - stores total revenue?...

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Econ 2023 Activity 7 Name:____________________________ Calculating Elasticity 1. You are the manager of a music store and you noticed that when the price of Lil. Wayne CD’s went from $15 to $25, the quantity of Lil. Wayne CDs demanded went from 60 down to 40. A. Calculate the price elasticity of demand for Lil. Wayne CDs. B. Is the demand for Lil. Wayne CDs elastic, inelastic, or unitary elastic? Please explain. C. Given your answer to part B, what should you do if you want to increase the
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Unformatted text preview: stores total revenue? 2. Calculate the income elasticity of the following goods and say whether they are necessities, luxuries, or inferior goods. A. When income decreases by 20%, the quantity of gas demanded decreases by 10%. B. When income increases by 10%, the quantity of new cars demanded increases by 15%. C. When income increases by 25%, the quantity of baloney demanded decreases by 5%....
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This document was uploaded on 10/31/2011 for the course ECO ECO2023 at FSU.

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